Destination Competitiveness Measurement: Analysis of ... - Wu-wien

Destination Competitiveness Measurement:
Analysis of Effective Factors and Indicators
Metin Kozak
School of Leisure and Food Management
Sheffield Hallam University
Sheffield / UK
Tel: + 44 114 225 44 94
Fax: + 44 114 225 44 88
E-mail: M.Kozak@shu.ac.uk
1. Overview of Destination Comparison / Competitiveness Research
Even though competition will become increasingly fierce in the 21st century
(Ireland and Hitt 1999), little research has been carried out dealing with the topic
of competitiveness of different tourist destinations either at the regional/national or
international level (e.g. Briguglio and Vella 1995; Edwards 1993). It is claimed
that a full competitive destination analysis has not received widespread recognition
in the tourism literature (Pearce 1997).
As Table 1 shows, both primary and secondary types of data collection methods
have been employed to carry out destination comparison / competitiveness
research. Secondary data collection methods have primarily focused upon the
analysis of figures, whereas primary research methods focus solely on investigating
customer attitudes towards or perceptions of the attractiveness of several
individual destinations.
Much of the research conducted using primary methods has been conducted
without evidence about whether respondents have been to sample destinations, and
research to date does not provide a full account of destination competitiveness
(e.g. Javalgi, Thomas and Rao 1992; Driscoll, Lawson and Niven 1994). It is
expected that sample populations should have direct experience in order to
respond accurately to all questions regarding their actual holiday experiences with
each of these destinations. Otherwise, findings do not reflect the accurate
performance of destinations.
In recent years, tourism has become a highly competitive market. For this reason it
is important that destinations are able to measure their competitiveness in order to
identify their strengths and weaknesses and thereby develop their future strategies.
Some of the reasons for measuring and assessing the factors which influence
destination competitiveness can be listed as follows (Keller and Smeral 1997):
• New destinations have emerged in the market (e.g. Caribbean and eastern
Mediterranean).
• Tour operators and media are having an increasing impact on the market.
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Table 1: Overview of previous destination comparison / competitiveness research
Author Method Type Criteria
Pearce 1997 Secondary data Destination competitiveness market, access, attractions, accommodation supply, prices, development processes
Grabler 1997 Primary data Destination positioning of Accommodation, entertainment, ambience, cultural resources, level of prices, accessibility of amenities and destinations,
urban destinations
location, originality, attitude, shopping facilities, food and beverage quality
Seaton 1996 Secondary data Destination competitiveness tourist arrivals, number of bednights, tourism receipts, occupancy trends, seasonality trends, balance of tourism payment
trends, portion of tourism in GDP, market dependence trends, tourism employment trends and marketing expenditure trends
Briguglios and Vella 1995 Secondary data Destination competitiveness political factors, exchange rates, marketing, development of new products, human resources, hygiene and environmental
factors, tourist services
Bray 1996 Secondary data Destination competitiveness prices, exchange rates, market, access
Edwards 1993 Secondary data destination competitiveness exchange rates, prices
Dieke 1993 Secondary data destination comparison number of arrivals, purpose of visits, bednights, accommodation supply, seasonality, tourism receipts, employment, tourism
policies, market and tourist expenditures
Soanne 1993 Secondary data destination comparison structural changes in demography, infrastructure and urban geography
Javalgi, Thomas and Rao 1992 Primary data destination competitiveness tourist perceptions of several destination attributes
Calantone, Benedetto, Hakem and Primary data destination competitiveness tourist perceptions of several destination attributes (shopping facilities, hospitality, safety, food, culture, tourist attractions,
Bojanic 1989
tourist facilities, nightlife and entertainment, scenery, beaches and water sports
Goodrich 1977 Primary data destination comparison tourist perceptions of similarities and differences between nine regions on water sports and sports, historical and cultural
interests, scenic beauty, hospitality, rest and relaxation, shopping facilities, cuisine, entertainment and accommodations
Goodrich 1978 Primary data destination comparison tourist perceptions of nine regions and their intention to choose them. Attributes were same as above.
Haahti and Yavas 1983; Haahti Primary data destination competitiveness tourist perceptions of 12 European countries on value for money, accessibility, sport facilities and other activities, nightlife
1986
and entertainment, peaceful and quietness, hospitality, wilderness, tracking and camping, cultural experience, scenery,
change from the usual destinations
Driscoll, Lawson and Niven 1994 Primary data destination comparison tourist perceptions of 12 destinations on 18 attributes such as facilities, landscape, safety, climate, culture, modern society,
different experience, value for money, accessibility, shopping facilities, organised activities, cleanliness, family-oriented,
exotic place, outdoor activities, religious values, hospitality, nightlife and entertainment
Javalgi, Thomas and Rao 1992 Primary data destination comparison traveller perceptions of European destinations (as 4 major regions) about 27 attributes
Woodside and Lysonski 1989 Primary data destination competitiveness developing a destination set where any destination is chosen among alternatives
Faulkner, Oppermann and Fredline
1999
Primary data destination competitiveness analysis of travel agents' perceptions of core tourist attractions
Botho, Crompton and Kim 1999 Primary data destination competitiveness tourist motivations and tourist perceptions of entertainment, infrastructure, physical environment and wildlife.
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• Tourists are more experienced and knowledgeable, e.g. language, use of
transportation, booking travel and having experiences with the same
destination more than once.
• Tourists and tour operators are now becoming more concerned about the
environmental quality of facilities and destinations.
These appear to be pressures on tourist destinations which are increasing the
competition. The following statement refers to the importance of individual
establishments in maintaining competitiveness in international tourism (Murphy
1997: 3):
“Many tourism businesses believe they need to sell their
destination before they can sell their individual offerings. This
can be achieved by increasing the competitive advantage of the
whole product mix, so that individual businesses benefit from
the increased profile and trade.”
Among the most significant activities that destination management should consider
are the planning, organisation, leading and/or motivating staff, and controlling
standards and information. When a benchmarking study is conducted amongst the
similar types of tourist destinations, this allows any of the destinations not only to
evaluate the nature of its competition, but also to identify new market
opportunities (Goodall 1990) both by analysing intermediaries who bring more
tourists from either traditional or potential markets, and the consumers themselves.
A number of factors may influence a clear analysis of a destination competitiveness
study including the type of holidays taken either as a part of inclusive tours or
individually, the type of tour operators, differences between seasons and between
climate conditions. Destination competitiveness analysis may be further inhibited by
consumer expectations, motivations, past experiences and the location, which
could have an impact on directing the competitiveness of destinations in each
market. Indirect competition becomes clear when it is uncertain to identify how
consumers perceive similarities and differences between long and short-haul
destinations
2. Destination choice and competitiveness
As with every industry and business, many tourist destinations are in competition
with each other (Heath and Wall 1992). It is emphasised that the competitiveness is
established between destinations and tourism organisations rather than countries
because of the different aspects and features of the destinations in a country
(Bordas 1992). This totally depends on how much a destination is more popular
than its country, e.g. Edinburgh, Paris and Bali.
Nevertheless, according to this approach, each geographical part of a country can
be in competition individually with other similar foreign regions on the basis of
facilities, cultural heritage assets and natural history. For example, Istanbul, as a
culture, business and congress tourism centre may be in competition with its
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European counterparts; central Anatolia, as a culture tourism centre, with mainland
Greece region and eastern European countries. In this sense, for summer vacation
tourism Spain is not expected to be in direct competition with Turkey, but the
Balearic Islands may be with the Aegean and Mediterranean coasts of Turkey.
It is clear that competitiveness between tourism organisations remains weak when
mass tourism is the subject of the discussion. The majority of consumers may have
experience of other destinations. It is also expected that consumers are likely to
make comparisons between facilities, attractions and service standards of other
destinations (Laws 1995). In general, “the choice of a particular good or service is
the result of a comparison of its perceived attributes with the person’s set of
preferences” (Fishbein and Ajzen 1975 in Laws 1995: 113). Accordingly, it is
argued that a consumer selects a destination amongst alternatives and evaluates
each alternative considering its potential to serve the benefits he looks for (Mayo
and Jarvis 1981).
Tourist destinations are accepted to be a key component of the tourism system.
Each destinations offers a variety of products and services to attract tourists.
However, each tourist also has the opportunity and freedom to choose amongst a
set of destinations (Laws 1991). Different factors may have an influence on
destination choice. For instance, each tourist may have different motivations and
preferences for different destinations. It is further suggested that attitude is a
predictor of determining a destination to be selected amongst alternatives in the
awareness set (Goodrich 1977; 1978; Mayo and Jarvis 1981; Um and Crompton
1990). Each destination therefore needs to know its performance levels through
considering those strengths and weaknesses, which will affect both repeat visits
and the nature of word-of-mouth communication to others considering a first time
visit.
It is reported that tourists mentally categorise destinations. One proposed
categorisation is into 'consideration' (evoked), 'inert' and 'inept' sets (Woodside and
Lysonski 1989). The 'consideration' set includes all destinations that a customer is
aware of and likely to visit to some extent. The 'inert' set represents all destinations
that the customer is aware of but no decision is made to visit in a specific time
period. Finally, the 'inept' set refers to destination (s) that the customer is aware of,
but has no intention to visit in a specific time period. According to Um and
Crompton (1990), tourists are expected to select a destination from a set of
alternatives in the 'consideration' (evoked) set. Destinations effectively compete
with each other for a place in the consideration set of their target consumers;
findings empirically proved that any destination ranked as the first in the
consideration set comes the first to be chosen for travel (Woodside and Lysonski
1989).
Despite the fact that there are thousands of destinations around the world, tourist
destinations are subject to immense competition as potential tourists' ability to
choose any of those from the set is limited (Woodside and Sherrell 1977). When a
tourist selects a destination for their holiday in a given time, the competing
destinations will lose their opportunity, as it is practically impossible for anyone to
fulfil a desire to visit places all over the world. This refers to the importance of
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consumers’ awareness and familiarity with the destination and the marketing
potential of the destination management for taking a place in the consideration set.
Some empirical papers have focused on the influences of tourist satisfaction and
the level of previous experiences over the probability of return to the same
destination. Future behavioural intentions are suggested to be not only an outcome
of satisfaction and attitude towards destinations, but also experience-based
measures such as previous experiences with the subject (Mazursky 1989). In
addition to satisfaction variables, the level of previous experiences has also been
found to be a determinant of the intention to revisit the destination (Court and
Lupton 1997; Kozak and Rimmington 1999). On the basis of age groups, elderly
people consider past holiday experiences more important than other age groups
when choosing a destination (Gitelson and Crompton 1984; Ryan 1995). Research
findings have confirmed that familiarity has a positive impact on the likelihood of
revisiting a destination (Gitelson and Crompton 1984; Milman and Pizam 1995).
Therefore, destinations in the 'inept' set need action to bring them into the
'consideration' set. Destination management should always be aware of what they
and their competitors provide and how they perform, due to the possibility of tour
operators and consumers exploring new destinations. They should also pay
attention to developments in consumer needs, wants and perceptions. For example,
Greece monitors the changes over socio-economic, socio-demographic and holiday
taking patterns of its international consumers (Kotler, Haider and Rein 1994).
When tourist destinations are considered as an element of marketing mix (place),
the importance of their performance levels seems clear.
3. Factors affecting Destination Competitiveness
In general, the competitive performance of organisations is defined from the input
and output side. The input measure is based on physical and human capital
endowment and research and development expenses. The output side covers
profitability, market share, productivity, growth and so on (Jacopson and
O'Callaghan 1996). Based on this grouping, the input side of destination
competitiveness could be physical sources (tourist facilities, infrastructure and
environment), human capital endowment (services), and marketing and promotion
expenses. The output side is market share both in the number of arrivals and the
amount of tourism receipts, productivity and so on.
As Pearce (1997) implies, a competitive analysis refers to comparative studies.
Therefore, destination competitiveness can be evaluated both quantitatively and
qualitatively. Quantitative performance of a destination can be measured by
looking at numbers such as annual numbers of tourist arrivals, amount of annual
tourism receipts, level of expenditure per tourist, length of overnight stays.
However, there is also a need to take into account the qualitative patterns of
destination competitiveness, as these ultimately drive quantitative performance,
e.g. socio-economic and socio-demographic profiles of tourists, level of tourist
satisfaction, dissatisfaction or complaints, comments of tour operators or other
intermediaries, quality of staff working in tourism, quality of facilities and services
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in tourism. Dimensions contributing to qualitative competitiveness include those
attributes or items which holidaymakers best liked during their vacation in the
destination. The assumption here is that in arriving at a positive or negative view
tourists will compare these attributes in terms of their experience in other
destinations.
A Chinese proverb attributed to Sun Tzu, a Chinese General, in 500 BC has gained
a respectful response from benchmarking researchers: “If you know your enemy
and know yourself, you need not to fear the results of a hundred battles”. (Camp
1989: 253). This means that if the destination knows itself and its competitors, it
should not be worried about the competition in the market. On the other hand, if
the competitor is believed to be strongly competitive, it is important to consider.
Battles could be both internal and external barriers affecting the success of the
organisation or the destination and its competitiveness in the marketplace. These
factors are explained in detail in the following section.
3.1 Socio-economic Profile of Tourism Demand and Changes in Markets
The socio-economic and socio-demographic profiles of tourism demand in
potential markets are a determinant for affecting the choice to vacation and its
direction towards particular destinations. The level of age, income, occupation,
time, whom to travel with and personality play a significant role in determining
destination choice process (Um and Crompton 1990). Consumers will be likely to
choose destinations where any or all of these variables are better matched with
what the destination offers.
Since every destination has a different product to attract consumers from different
markets, it unlikely to say that all destinations are able to compete for all market
segments. For example, Spain is a strong player on beach tourism whereas
Switzerland thrives on winter tourism. If a destination relies heavily on summer
vacations and offers cheaper holidays with longer duration, it can attract tourists
with low levels of income who intend to take vacations in summer time. To be
competitive, a specific type of market segment can be attracted, e.g. youth, elderly
people, explorers, fun-seekers, family groups and so on. This will reduce costs and
increase benefits sought in favour of consumers (value for money).
3.2. Access to Tourist Markets (Distance)
How close a destination is to the tourist markets is another determination of
destination competitiveness (Mill and Morrison 1992). Research findings revealed
that there is a reverse relationship between perceived distance and intention to visit
(Court and Lupton 1997) and revisit a destination (Mountinho and Trimble 1991).
The competitiveness of short and long-haul tourist destinations was examined on
the basis of comparison of prices levels, accommodation grading levels and
distance levels between the British tourist market and the destination by Edwards
(1993). Findings indicated that the level of prices were the strongest indicators of
competitiveness between long- and short-haul destinations since the former
destinations cost the consumer about double that of the latter destinations.
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However, the distance sometimes may not always be important in affecting the
flow of tourism demand to any destination. Some destinations such as the
Caribbean and Mauritius could be less competitive when grade rises, which means
that accommodation fares are likely to increase. Surprisingly, some other
destinations such as the South-Asian destinations, Goa (India), Kenya and Sri
Lanka become more competitive when accommodation grade rises. Therefore, it
can be suggested that short and long-haul destinations not be regarded as direct
competitors against each other. Moreover, any destination in the short-haul
destination can compete with the other. This means that most of the Mediterranean
destinations, for example, could be in a direct competition on beach holidays, e.g.
Turkey, Spain and Greece. This may be the same for long-haul destinations.
3.3. Mature Tourist Destinations and Consumer Psychology
By classifying the psychology of consumers in tourism under two headings such as
'allocentric' (those who have active personality) and 'psychocentric' (those who
have passive personality), Plog (1974) suggested that such typology could be
effective in understanding why destinations fall or rise in popularity. According to
his approach, destinations move from 'allocentrics' to 'psychocentrics' because the
latter attracts those who discover a new place to vacation and enjoy. But as long as
word-of-mouth communication is concerned and more others are informed, the
destination begins to leave 'allocentrics' and move towards 'psychocentric' travellers
on the pscyhographic scale. The degree of movement largely depends upon the
extent to which a destination becomes popular. When it increasingly becomes
popular, it means that natural resources may become deteriorated. As the
destination is likely to become an 'ordinary' place, then 'allocentrics' will be
substituted by 'psychocentrics'.
As a consequence, the destination faces several management and marketing
problems since 'pschocentrics' are believed not to travel as often as 'allocentrics' do
and stay and spend less. Moreover, it becomes more commercialised by losing its
features which attract tourists and its competitiveness in the market. In such a
situation, Plog (1974) suggests that destinations attracting more 'mid-centric' to
'psychocentric' tourists need to release new strategies in order to reach those who
travel more often and spend more.
In the ‘consolidation’ and ‘stagnation’ stages of the resort life cycle model (Butler
1980), destinations are more dependent on inclusive tours. As a result, the rate of
increase of tourists slows, whereas total numbers are still increasing and the
demand profile of the destination is dominated by repeat visits (Laws and Cooper
1998). The yield gained from tourists using inclusive tour holidays is lower than
that of others because the destinations dealing with inclusive tours are largely
dependent on marketing channels via intermediaries, tour operators or travel
agents. The destination will be at a disadvantage if intermediaries have more
powerful bargaining power.
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3.4. Influences of Tourist Satisfaction
Understanding what a satisfied customer needs and wants is the basic ingredient of
a recipe in arriving at successful marketing and improving competitive advantage
(Czepiel, Rosenberg and Akerele 1974). Attention is drawn to the importance of
tourist perceptions in successful destination marketing since they influence the
choice of a destination (Ahmed 1991), the consumption of goods and services
while on holiday and the decision to return (Stevens 1992). The reason for this is
that the majority of tourists have experience of other destinations with which they
make comparisons for example between facilities, attractions and service standards
(Laws 1995). As a consequence, customer-centred organisation or destinations will
have greater opportunity to win over the competition (Kotler 1994).
Competitiveness is the key element of management and marketing strategy,
therefore long-range planning and customer satisfaction should be the two major
objectives of either tourism businesses or tourist destinations. Thus, maintaining a
long-term relationship with customers is a part of competitive advantage. Among
the long-term benefits of customer satisfaction are a shift upwards in the demand
curve, reduction in marketing costs, increase in marketing costs of competitors to
attract other’s customers, reduction in customer and employee turnover and
enhancement of positive word-of-mouth communication (Fornell 1992). The
measurement of customer satisfaction provides benefits for both customers and
organisations. The feedback from customers can be used to increase the level of
service quality and employee motivations which in turn lead to more satisfied
customers and employees.
Consumers are an important source of identifying external ideas for many products
and services; surveys enable them to reflect on their opinions about and
experiences with the destination and can be used to benchmark many aspects of
performance against competitors.
3.5. Marketing by Tour Operators and their Perceptions of Destinations
Where package tours are concerned, the extent to which a destination can attract
the interest of tour operators and how it can be included in their brochures will be
effective in reaching the market. Tour operators feel themselves to be ahead of
tourist destinations as they, as international suppliers and / or retailers, have to
search for better products, applications or destinations for meeting consumer
requirements and following changes in their wants and needs.
The image of the product (destination) is primarily influenced by tour operators’
promotional activities in the tourist generating country. Depending on the volume
of income or the appearance of any problem, tour operators are likely to switch
their customers to alternative resorts / destinations (Carey, Gountas and Gilbert
1997). Tour operators consider themselves to be responsible for monitoring the
situation in a destination; they offer holidays to alternative destinations if any threat
is posed to their customers. If a destination is considered unsuccessful, tour
operators are likely to exclude such destinations from their portfolios for the
following season (Goodall and Bergsma 1990). In this regard, it can be claimed
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that any competition between tour operators plays a critical role in increasing the
competition among international tourist destinations (Buck 1988).
In short, marketing via tour operators presents benefits as well as threats for the
competitive position of any destination in the international arena. A good example
can be given from Turkey. Most tourists visiting Turkey have booked via a tour
operator. Turkey takes a higher place on the league table of international
destinations when internal or external economic, social or political crisis disappear
and tour operators are promoting and selling it. On the other hand, it has a lower
ranking when any of these crisis is in upward trend and tour operators stop selling
it.
3.6. Prices and Costs
The price elasticity of tourism demand is assumed to be high (e.g. Icoz and Kozak
1998). Thus, any percentage change in prices is expected directly to encourage or
discourage a travel to a certain place. Cost leadership is one of the two primary
objectives for gaining competitiveness (Porter 1985). The relative prices of a
destination in comparison to some other places are the main destination attribute
for motivation to travel. Smeral (1997) contends that some mature destinations are
forced to compete with others at price levels, but are less competitive in prices or
costs. For instance, destinations such as Turkey, Cyprus and Greece have appeared
with their cheaper labour and production costs against Spain, Italy and France.
Given the results of a brochure-based price competitive analysis, some researchers
attempted to measure the competitiveness of destinations (Edwards 1993;
Briguglio and Vella 1995). For instance, Turkey was found to be cheaper than
Malta for the German market and Mallorca for the British and German market
(Briguglio and Vella 1995). Nevertheless, it was highlighted that ‘the price
becomes less significant factor in holiday decision-making due to the decrease of
elasticity in tourism demand. Instead value for money is what guides the choice of
most tourists.’ (Buhalis and Cooper 1998, p.86). Therefore, value for money and
product quality are the main objectives for enhancing competitiveness (Carey,
Gountas and Gilbert 1997).
3.7. Exchange rates
In the theory of tourism economics, a tourist is expected to prefer travelling to a
destination where the value of his own currency is higher than others (Witt and
Martin 1987). Findings of an empirical research with respect to major economic
variables influencing foreign tourism demand through Turkey indicated that the
foreign currency exchange rates had a significant impact over tourism demand
(Icoz, Var and Kozak 1998). Turkey was seen as a cheaper country by British and
German holidaymakers since the value of Turkish Lira (TL) against British Sterling
(£) and German Mark (DM) has decreased considerably in the recent years. As a
result, the room rates of accommodation facilities remained at a low level,
stimulating the interests of foreign tourism demand and tour operators.
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In international tourism competitiveness, there is a close relationship between
changes in exchange rates and changes in the level of prices. In other words,
positive or negative changes in exchange rate of a sample country against those of
tourist generating countries may lead to an increase or decrease in the level of
tourist product and service prices (Icoz and Kozak 1998). For instance,
Switzerland and Japan have become more expensive countries while Israel and
Greece are relatively cheaper in the eyes of potential tourists as a result of
fluctuations in exchange rates.
3.8. Use of Information Technologies
It is believed that the future competitiveness of tourist destinations will largely
depend on the range of new telecommunication technologies being used and the
extent to which destinations have access to the marketing and promotion
opportunity via such technologies (Buhalis and Cooper 1998). Inequality in gaining
access to information technology (IT) may possibly create first and second class
tourist destinations, organisations and consumer groups (Rimmington and Kozak
1997). Such imbalance between developed and developing countries or tourist
destinations could be the direct consequence of IT for the international tourism and
travel marketing. Tourist destinations and organisations with undeveloped
telecommunication structures could be less suitable for the internet marketing as
being slower, weaker and more expensive. Despite the benefits of the internet,
small tourism organisations may not be able to afford it. Thus, large organisations
will be able to preserve their leadership by dominating internet marketing activities.
Distribution channels in tourism and travel are undergoing a dramatic change.
While large or international businesses have welcomed new developments in IT
seeing them as opportunities to be more competitive in the market, small and
medium-sized businesses are forced to adapt themselves into the new business
environment.
However, the question as to how to investigate the extent to which the competition
(or balance) between developed and developing countries, or destinations, will be
affected by such developments in IT remains unanswered. Does this mean that
businesses in developing countries cannot sell their tourism products on the
internet since they do not have ready access to IT as in many developed countries?
Or do intermediaries still have a catalyst role in keeping both types of countries on
the balance? Current trends demonstrate that developing countries such as the
eastern Mediterranean, eastern Europe and the Far-east are becoming increasingly
popular both for individual and mass tourism activities. They are considered
culturally and naturally attractive, exotic and up-market destinations. It is difficult
to predict if this will continue when the use of IT spreads.
3.9. Safety, Security and Risk
The view that image is a critical factor while choosing destinations to vacation is
widely supported (e.g. Court and Lupton 1997; Goodall 1988). Making tourists
feel secure and safe before and during the vacation is essential to the international
competitiveness of destinations. Additional destinations can take place in the
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consideration set of the destination choice model if a new destination is suggested
and new information (e.g. recent violence or political or social unrest) is supplied
either by friends or media (Sonmez and Graefe 1998). In his analysis of the Florida
tourism industry, Brayshaw (1995) states that negative image created by being
unsecured may damage the tourism industry because the negative word-of-mouth
communication which results from negative images cannot be avoided, even if a
destination has high quality tourist attractions.
During the vacation, there is a possible risk of violence against tourists, or petty
crime in tourist destinations. Safety and security problems are higher in particular
destinations which are experiencing rapid development in their tourism industry
(Tarlow, Pizam and Bloom 1996). Survey results revealed that perceived risk and
safety concerns were found to be stronger predictors of not choosing regions (or
some destinations) for vacation in the future (Sonmez and Graefe 1998). Those
who perceived certain destinations 'at risk' are likely to avoid them in their future
travel plans, e.g. the Middle East and Africa.
Internal social and political turmoil are other issues which need to be considered
within the perceived risk of tourist destinations. The existence of unrest in some
countries such as Romania, the former Yugoslavia, Tunisia and Egypt in recent
years has affected their previous positive trends in the development of tourism
activities.
3.10. Product Differentiation (Positioning)
The differentiation of products is another factor in maintaining competitive
advantage (Porter 1985). There is a close relationship between competition and
innovation; new product development therefore will be the cornerstone of
destination competitiveness. Differentiation can be dependent either on product or
market. Different approaches to the definition of destination positioning exist in the
literature. For instance, Heath and Wall (1992: 114-5) state that positioning is “the
art of developing and communicating meaningful differences between a region’s
tourism offerings and those of competitors serving the same target market”.
Similarly, Crompton, Fakeye and Lue (1992: 20) refer to “the process of
establishing and maintaining a distinctive place for a destination in the minds of
potential travellers within target markets”. Therefore, customer perceptions could
be regarded as a correct destination positioning strategy (Javalgi, Thomas and Rao
1992). Ahmed (1991) emphasises that:
“the comparison of destinations’ strengths and weaknesses
with those of competitors is an element of a correct product
positioning strategy. A destination should select a position in
which it can attain a strong competitive advantage and link it
to target markets”.
Similarly, Grabler (1997) claims that an accurate positioning strategy requires the
comparison of a product with its competitors. The position where the host
destination has a great difference from its competitor (s) will represent its
uniqueness. Given this, the competitive advantage of a destination could be gained
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y improving and innovating different aspects of its characteristics, such as
increasing the quality of the existing tourist resources and services and adding new
and attractive features (Choy 1992), improving technology and the productivity of
the standardised production of services and improving the effective use of capital
(Bordas 1994). Goodall (1990) mentions the importance of innovation,
improvement and extension of transport networks and new and revised legislation
for the comparative advantage of destinations. He also adds that destinations need
to be very sensitive to such changes in order to maintain their market shares and
introduce new products to increase the homogeneity of demand for the destination.
To give an example, Poetschke (1995) states that island destinations have several
disadvantages in securing a proper place in destination competitiveness. Factors
which inhibit their destination competitiveness include limited access (by air or sea
only), fragile ecosystems and dependency on tourism. They are also limited in the
variety of products on offer. Moreover, Sandbach (1997) states that long-haul and
exotic destinations are becoming competitors against European destinations for the
European tourists. Europe has become a mature tourist destination and has
experienced difficulties adapting itself to meet changing consumer needs and
wants.
3.11. Adequacy and Quality of Tourist Facilities and Services
An efficient service is expected for check-in and check-out procedures at the
destination airport along with accommodation facilities, food and beverage
facilities. Since time is limited, tourists intend to have more experience in a shorter
time rather than wasting time in queuing or complaining. As far as mass tourism
and package tour holidays are concerned, tourists are becoming more sensitive
towards services, particularly at the resort airport and accommodation facilities.
Keller and Smeral (1997) claim that destination-based factor endowments such as
natural and cultural resources, capital and infrastructure resources, and human
resources affect the competitiveness level of a destination. The authors further
state that quality in tourism encompasses three main components:
• natural quality (environmental matters)
• material quality (facilities such as accommodation, restaurants, shopping, sport
and cultural etc.)
• non-material quality (services such as information guidance, housekeeping,
speed of check-in and check-out procedures etc.)
A destination competitiveness is sensitive to these components. The
implementation of factor-creating mechanisms such as education, research and
development and investment programmes are some of the most significant tools for
creating a sustainable competitive advantage for international tourist destinations.
Eliminating bureaucratic barriers could further improve tourist services and quality,
and reinforce the competitiveness of a destination (Keller and Smeral 1997).
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3.12. Quality of Environmental Resources
In an increasingly competitive business environment, the environmental quality of
the tourist destinations represents a vital ingredient in the recipe for success.
Therefore, it is proposed that to remain competitive in the future marketplace, both
destinations and organisations must adopt environmentally-friendly policies (Zahra
1999). Policies and programmes which are designed to protect natural resources
whilst simultaneously making use of them have already been established by most
tourist destinations and tourist organisations.
Even though environmental quality is considered to be a key element of the
determination of competitiveness in tourism, the most distinctive part of the
tourism industry (or tourism economics) is that it does not yet take into account
the opportunity cost of environmental resources when producing a tourism
product. Hence, it is believed that tourism services (or products) are cheaper
because tourism suppliers think that such tourism resources do not need any cost
to complete the whole product. Moreover, tourism suppliers are currently
unwilling to accept their responsibility for the negative consequences of tourism
development such as deregulation, overcrowding, traffic congestion, garbage and
so on.
It is evident that environmental considerations are a significant element affecting a
travellers' destination choice. Research findings revealed that about half of German
tourists have considerable awareness of environmental quality issues when
choosing a destination to vacation (Ayala 1996). It is believed that the future
competitiveness of destinations will be based on the extent to which they are
concerned with their sustainability. Therefore, existing tourist destinations are
keen on developing new strategies and releasing policies on how to protect the
natural environment and present themselves effectively to the market. The
importance of environmental quality becomes clear when the degradation of beach
quality at ‘sea, sun and sand’ holiday destinations leads to a negative impact on the
number of tourist arrivals, length of bednights and the number of repeat visits. As a
consequence, a low level of tourism income is generated (Dharmaratne and
Brathwaite 1998).
3.13. Human Resources
Human resources are deemed to be one of the most significant inputs within the
organisation to gain full competitive advantage (Ireland and Hitt 1999). As a part
of the service industry, tourism will continue to require a great number of skilled
human resources to decrease labour shortages in the near future. It is widely
known and accepted that tourism is an industry which requires an intense face-toface
contact between hosts (or staff) and tourists. Attitudes of local people
towards tourists, approaches to tourism development and the development of
programmes to train both personnel and local people will indicate the position of a
destination in the competitiveness set.
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3.14. Government Policies (Entry barriers)
The development of tourism can make a considerable contribution to regional
economic development. This has led the governments of some countries to take
responsibility for investment, control, planning, co-ordination and financial issues
within their nation's tourism industry. By using these responsibilities, governments
can control the flow of tourists to the country. Therefore, where tourism is
considered to have a negative impact on social and natural structure, restrictions to
entry can be established. Where tourism is considered, governments strongly
encourage the development of the tourism industry to attract more tourists and
higher income. For example, in an attempt to increase the number of tourist
arrivals, the Kenyan government has recently decided to drop the visa charge for
those from some European countries (The Times 1999). The growth of publicprivate
partnerships in tourism management and promotion of countries such as
Germany, Romania, Tunisia and India have also been observed (http:www.worldtourism.org).
Those who release comprehensive contemporary tourism programmes and open
their national resources to the experience of the foreign public will gain the
advantage of being a leader in the international tourism industry.
4. Indicators of Destination Competitiveness
There are a number of criteria to assess the performance of tourist destinations on
the table of competitiveness; however, this study will explore only four of these.
These are the volume of tourist arrivals, the volume of repeat tourists, the volume
of tourism receipts and the share of tourism receipts in Gross National Product
(GNP) which are explained in detail below.
4.1. The volume of tourist arrivals
As a traditional approach, the number of foreign arrivals has been used to rank all
destinations (or countries) on the list. The higher the number of annual tourist
arrivals, the stronger the destination in competitiveness. The performance of a
particular destination or region is also examined by evaluating the percentage
changes over the total number comparing to the preceding years. For instance,
China was ranked as the fifth most tourist receiving destination in 1996, while it
was 12th in 1990. Though this method has been used by leading tourism
organisations, primarily World Tourism Organisation (WTO), over many years, it
has several weaknesses, including the difficulty of collecting reliable data and of
anticipating the future.
4.2. The volume of repeat tourists
The basic idea of this approach is that the higher the number of repeat tourists to
the same destination and the higher the frequency, the more it is attractive and
competitive in the market. However, the high level of repeat visits is not a panacea
since it will not necessarily offer the destination a competitive advantage over
similar destinations. In other words, repeat visits can be a problem as well as a
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strength. For instance, some mass tourist destinations such as the Spanish islands
(the Balearic and Canary Islands) attach themselves to Plog’s (1974) pyschocentric
tourist typology by attracting high density repeat tourists from Europe with their
low level of income and the tendency to prefer largely package tours.
Oppermann (1998: 135), however, claims that “in fact, destination marketers do
not really have to worry too much about the repeat visit ratio until it exceeds the
70 % and 80 % mark. By that time, however, the destination really needs to
reposition itself to attract new and different segments and to maintain its long-term
viability”. He further suggests that although the repeat business ranging between
50 % and 80 % from the same market is accepted to be in the critical boundary,
destination management should take this into account in their future planning. In
his most recent paper, Oppermann (1999) emphasised that destination management
does not have to focus on raising the percentage of repeat customers, but could
release a strategy to serve a mixture of both first-time and repeat customers.
Therefore, authorities should establish different marketing strategies appropriate to
each market segment (Mountinho and Trimble 1991). For example, in response to
Mallorca's difficulties balancing its first-time and high propensity repeat customers
amongst both British and German markets, destination management has focused
upon attracting tourism demand from Poland and Russia as emerging potential
tourist markets.
4.3. The volume of tourism receipts
The quality of tourists could be more important than their quantity to the success
of any destination. For example, considering the expenditure level of each tourist
could be more rational than the number of tourists in determining how tourism can
provide benefits to the destination. Thus, the notion that the greater the number of
tourists, the greater the net income generated to the local economy sometimes
cannot be supported. In that case, the volume of total tourism receipts yielded from
international tourism could be an indicator of the measurement of destination
competitiveness, since the more the amount of tourist spending the higher the
multiplier effect.
4.4. The share of tourism receipts in GNP
Any development in a particular tourism industry is recorded as a direct
contribution to GNP. The comparison analysis on the basis of the proportion of
tourism incomes within GNP between more than two destinations will display
which destination is yielding more benefits from international tourism. However, a
destination with a high proportion of GNP raised from tourism is at risk from
becoming over-dependent on the tourism industry.
Conclusion
As a result of the sensitive structure of the tourism industry towards political,
economic, social and environmental changes, including the risk of natural disasters,
it is difficult to recommend a single model or a single way to measure international
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tourist destination competitiveness and justify its reliability. It is obvious that few
destinations compete with one another for all market segments. In other words, it
is not reasonable to pair a summer and a winter destination or a summer and an
urban destination. The diversity of tourist destinations will also make it more
difficult to put all destinations in a single basket and rank them from the highest (or
the best) through to the lowest (or the least competitive). This study has presented
not only common factors thought to be influential over the competitive position of
any type of destination, but has also identified strengths and weaknesses of some of
the common measures which can be used for ranking destinations and evaluating
their performance levels. Competitors should be monitored on a regular basis in
line with the effective factors presented in this study. This will enable the
destination to reinforce the analysis of the market and identify its own as well as
others' strengths and weaknesses. The findings may help the destination to develop
the correct positioning strategy.
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